Personal Spending Unexpectedly Falls

The latest personal income and outlays report from the BEA showed that personal spending fell 0.1% in July, missing expectations for spending to rise 0.2%.

Personal income rose 0.2% in July, slightly less than the 0.3% that was expected.

Core PCE, the Fed's preferred measure of inflation, rose 1.5% year-over-year in July. This was in-line with expectations.

The report showed that private wages and salaries increased $12.9 billion in July, less than the $25.6 billion increase seen in June, while supplements to wages and salaries rose $3.7 billion July, which compares to a $4.8 billion increase in June.

Following the report, Paul Dales, senior U.S. economist at Capital Economics, said the decline in personal spending, "confirms our suspicion that consumption was weak at the start of the third quarter."

"The recent strength of the business surveys, however, suggests that overall annualized GDP growth could still get close to 3%," Dales said.